Monday, October 31, 2011
Business Incorporation - Why It Is Necessary
When starting a business, the first step should always be to first determine the best ways to protect yourself and your assets from being lost due to unforeseen problems and challenges that could come up when operating a business.
The first and most important step is business incorporation. Business incorporation involves setting up a separate legal entity to be the operator of the business. You can be an owner of the entity and you can also be actively involved as a director, officer and agent of the business. When you incorporate, it is the corporation that is party conducting the business. When you are representing the business, you are acting as an agent or employee. What this does is it creates a layer of protection between you personally and the business activity.
It is business activity that can give rise to liability. Lets say your business enters into a supplier contract and there is a dispute. Or, another example might be if your business has a store and someone slips and falls. Or, say you have a rogue employee who sues the business for wrongful termination. In all these cases, the party that needs to address the dispute is the legal entity business. Without business incorporation, it would be you personally who would be the target of the problems.
And, if in the end of any of these kinds of disputes, you are found liable, then your personal assets are at risk for making good on the liability. On the other hand, if you run your business through a separate legal vehicles such as a corporation or a limited liability company, then it is the company's assets that are at risk- but not your personally.
Because business disputes and challenges are inevitable in almost any entrepreneurial venture, this protection is so important. Furthermore, with the substantial rise of small business lawsuits (a trend that is only continuing), this becomes even more essential for business owners.
Business Incorporation can be handled as an administrative matter with the state agency that processes formations. You can handle it yourself but it is critical that you learn all the specific requirements because an improper incorporation can put your liability at risk. Another option is to hire a lawyer or for a more affordable alternative, you can use a reputable incorporation services provider - just make sure they are experienced.
Article Source: http://EzineArticles.com/5808558
Friday, October 28, 2011
Uncontested Divorce - The Basics
If you and your husband or wife have decided that you want to get divorced, you want the legal process of dissolving your marriage to be as simple as possible. If that is the case you will want to know more about uncontested divorces, which have a number of benefits for both of you. Here are some basic ideas and suggestions, as well as information about uncontested divorce that will help you move forward.
First of all you should be aware that an uncontested divorce doesn't necessarily mean you agree on the reasons for the divorce. It is not the same as a 'no fault' divorce. What it means is that you and your 'soon to be ex' have agreed that you want to get through it in a civilised way. It means that you have agreed that the property acquired during the marriage is being divided fairly along with any savings, pensions or debts. You should also both feel that the separation of assets pays attention to the needs of each of you. You may want to get a lawyer to check over the finer points if your finances are complicated but if not, you can get uncontested divorce forms online. If you can negotiate the terms between you it is far less traumatic and much cheaper.
One key point is that you should take your time. You should never rush the process, having an uncontested divorce usually speeds up the process dramatically, even when you take time to negotiate. You can usually sort things out in a few weeks whereas some contested divorces can go on for months with bitter arguments causing upset, especially to any children involved.
There are many advantages to an uncontested divorce, one of which is, undoubtedly, the cost. An 'uncontested divorce' means that both of you agree to all the terms of divorce, which means you don't have to pay for additional court fees or even pay an attorney for the extra time they would have to spend on sorting out the division of y our assets. This can be very helpful if money is tight as you don't have to spend large sums of money going to court. You could perhaps save it towards your living expenses after the divorce or for your children, or some of the larger expenses that you may not foresee when you are first on your own.
If you do decide to opt for a lawyer, you need to remember that your family lawyer cannot act for both of you, even if the divorce is uncontested and fairly amicable. One of the things you should decide early on is which of you will use the family lawyer, unless you both decide to go elsewhere or to do it yourself. Your lawyer will meet with you to sort out all the documents that are involved in getting a divorce. You will the opportunity to see what is in the documents before they go to your spouse and then to the court. The more you can sort out beforehand, the better it will be. There may be times when both of you will have to meet with your respective lawyers to go over the terms of your divorce, even if you have agreed the terms if there are complicated matters to sort out.
The key thing is to keep open the lines of communication so that your divorce can be as simple as possible.
Article Source: http://EzineArticles.com/4995578
First of all you should be aware that an uncontested divorce doesn't necessarily mean you agree on the reasons for the divorce. It is not the same as a 'no fault' divorce. What it means is that you and your 'soon to be ex' have agreed that you want to get through it in a civilised way. It means that you have agreed that the property acquired during the marriage is being divided fairly along with any savings, pensions or debts. You should also both feel that the separation of assets pays attention to the needs of each of you. You may want to get a lawyer to check over the finer points if your finances are complicated but if not, you can get uncontested divorce forms online. If you can negotiate the terms between you it is far less traumatic and much cheaper.
One key point is that you should take your time. You should never rush the process, having an uncontested divorce usually speeds up the process dramatically, even when you take time to negotiate. You can usually sort things out in a few weeks whereas some contested divorces can go on for months with bitter arguments causing upset, especially to any children involved.
There are many advantages to an uncontested divorce, one of which is, undoubtedly, the cost. An 'uncontested divorce' means that both of you agree to all the terms of divorce, which means you don't have to pay for additional court fees or even pay an attorney for the extra time they would have to spend on sorting out the division of y our assets. This can be very helpful if money is tight as you don't have to spend large sums of money going to court. You could perhaps save it towards your living expenses after the divorce or for your children, or some of the larger expenses that you may not foresee when you are first on your own.
If you do decide to opt for a lawyer, you need to remember that your family lawyer cannot act for both of you, even if the divorce is uncontested and fairly amicable. One of the things you should decide early on is which of you will use the family lawyer, unless you both decide to go elsewhere or to do it yourself. Your lawyer will meet with you to sort out all the documents that are involved in getting a divorce. You will the opportunity to see what is in the documents before they go to your spouse and then to the court. The more you can sort out beforehand, the better it will be. There may be times when both of you will have to meet with your respective lawyers to go over the terms of your divorce, even if you have agreed the terms if there are complicated matters to sort out.
The key thing is to keep open the lines of communication so that your divorce can be as simple as possible.
Article Source: http://EzineArticles.com/4995578
Wednesday, October 26, 2011
Will: Does My Will Need A Power Of Attorney?
No, a Will and a Power of Attorney are completely separate and do different things. When creating your Will you will also find that there is no section appropriate for listing a Power of Attorney to carry out your wishes. Instead, you will appoint an Executor to carry out the requirements and wishes under your Will.
On the other hand, a Power of Attorney appoints someone you nominate to take care of such things as some of the financial decisions on your behalf when you are unwilling, unable or just wanting some assistance to manage your affairs. A Will organises your personal affairs after your death. Your Will and any directives or provisions in your Will do not come into effect while you are alive. Any Power of Attorney ceases to exist upon your death so that any directive provided under it will be redundant and it becomes ineffectual after you pass away. Only one document can be in effect at one time depending on your personal state.
Both documents do generally have a similar effect, one operating while you are alive and one operating after your death. It is important to remember that although they seem to have the same function, what is stated in one does not have any effect on the other.
Your Will appoints an Executor who will take an appointed role after you pass away whilst the person you appoint in your Power of Attorney takes on the role and activities you have given them the power to do while you are alive.
Article Source: http://EzineArticles.com/5789491
Monday, October 24, 2011
Elderlaw - When Parent Loses Capacity
Long-term planning experts always suggest that you bring legal and financial matters up to your parents or loved ones before any crisis or major illness occurs. Unfortunately, not everything is set in stone for people. Or, they may go about planning for long-term care, but for whatever reason, whether they get busy with life or Mom and Dad don't want to cooperate, they never get around to it. Then, as one would expect, the inevitable happens. Mom falls and needs 24-hour care or Dad develops dementia from Parkinson's. All of a sudden, neither of them can make decisions on their own. You are suddenly faced with paying their mortgage, their nursing care, and other bills, only you do not have any rights. So, what do you do? Your choice is a conservatorship.
What is a Conservatorship?
A conservator is appointed through a court supervised hearing to manage financial or personal affairs for someone who is unable to do so on their own. There are 2 types of conservators: The Conservator of the Estate and the Conservator of the Person.
A conservator is appointed through a court supervised hearing to manage financial or personal affairs for someone who is unable to do so on their own. There are 2 types of conservators: The Conservator of the Estate and the Conservator of the Person.
* The Conservator of the Estate deals with the financial aspects.
* The Conservator of the Person deals with decisions on behalf of the conservatee.
* The Conservator of the Person deals with decisions on behalf of the conservatee.
A conservator may or may not be the same person and can be different people. They can be selected by a person before they lose mental capacity and hopefully the person selected is someone well-trusted. The conservatee also has the right to fight a conservatorship in court if they feel they have the capacity to make financial or medical decisions.
An attorney will be appointed by the court, should the conservatee become afflicted with a brain-impairment such as dementia.
Conservatorship without an Attorney
You can obtain information and forms to file a conservatorship through the probate clerk. A court hearing will be scheduled to determine if a conservatorship is granted. The local senior advocacy group in your town or city should be able to help you or your loved one file the appropriate forms.
You can obtain information and forms to file a conservatorship through the probate clerk. A court hearing will be scheduled to determine if a conservatorship is granted. The local senior advocacy group in your town or city should be able to help you or your loved one file the appropriate forms.
Procedures
1. The person affected should be informed if they need a conservatorship.
2. If the person does not understand what a conservatorship is and they have been diagnosed by a physician, the conservatorship should be put into place.
3. Once an investigation is conducted (prior to the appointment) and the proper papers have been filed, the court investigator will determine whether the person affected is suitable for a conservatorship.
1. The person affected should be informed if they need a conservatorship.
2. If the person does not understand what a conservatorship is and they have been diagnosed by a physician, the conservatorship should be put into place.
3. Once an investigation is conducted (prior to the appointment) and the proper papers have been filed, the court investigator will determine whether the person affected is suitable for a conservatorship.
The investigator is required to fill out a form stating why a conservatorship is needed and the investigation has to take place in no less than five days prior to the hearing. If the investigator recommends a conservatorship, the judge will probably follow the recommendation.If the individual is diagnosed with dementia, an attorney will represent the conservatee. To ensure this is a proper conservator for the proposed conservatee, all documents filed are reviewed by a probate examiner who posts on the internet, any corrections needed to be made a the probate court website. Any corrections must be filed 3 days prior to the hearing.
Follow-up investigations will continue after the first year has passed, and then every two years thereafter. Once the conservatorship papers have been completed and a capacity form as been signed by a physician, the conservatorship can take up to 2-3 months from filing. If limited paper work has been filled out, or there are many corrections to be made, a conservatorship can take up to 6 months.
Saturday, October 22, 2011
3 Reasons Why You Should File An Uncontested Divorce
Divorce is one of the most difficult situations that any individual can go through in their lifetime. The situation can actually become significantly more difficult in the event that there are children involved. However, it is a common misconception that all forms of divorce are difficult and only can be handled by engaging a fierce legal battle. Many times if the parties to divorce can agree on several major points they can actually file what is known as an Uncontested Divorce. This sort of legal remedy is not only mutually beneficial but it also is significantly less costly than a standard action that would be filed in the courts. Here are 3 major reasons why you should opt to file an Uncontested Divorce.
1. A significant decrease in costs associated with attorney fees and legal expenses due to the fact that most of the major issues that are typically disputed in the courts are already decided by the parties. It is without a doubt that attorney fees are quite high when it actually comes to cases dealing with a Divorce. As a result, it is always a very good idea to come to terms with the other side in order to taken advantage of an uncontested filing. This will not only speed up the process of the separation but it will also be significantly less expensive had it been a standard disputed case.
2. A very stress free and simple way of dividing the assets of the marital property between the parties. Typically there is a great deal of dispute regarding the splitting of the marital property. There is so much controversy and legal fighting that occurs as to who is really entitled to have a specific asset from the estate. However, when the parties decide as to who is to receive what asset then it makes sense to file an Uncontested Divorce because there will be no need for extra legal expense and headache associated with adjudicating the matter in court.
3. Easy method by which the custody of minor children is divided as well as determination of visitation rights. This is one of the most sensitive topics throughout the whole process because it involves minor children and they can be severely affected by the quarreling of the parents. However, when the matter is solved via an Uncontested Divorce then essentially there is less of a emotional burden on the children.
Article Source: http://EzineArticles.com/6154530
Wednesday, October 19, 2011
Why Everyone Needs at Least a Living Trust
There is one thing we all share in common: our days on this planet will come to an end - probably by surprise. That is about as basic a 'common denominator' as you can possibly get. To protect our loved ones from having to endure years of court procedures and legal fees, the Revocable Living Trust ('RLT') is a widely-used way to avoid the two related court proceedings known as Probate and Conservatorship, and to pass our assets on to one's loved ones with favorable tax planning.
WHAT IS CONSERVATORSHIP?
Conservatorship is court proceeding. It arises when someone cannot manage their financial affairs and it's time to have someone 'step in'. Maybe they've suffered a stroke or are in a coma or some other disabling condition. The court can appoint a 'Conservator' over the person or the estate or both. The conservator's job is to temporarily manage the financial affairs and property of the person they have been appointed for. This is often done by someone who's either a professional (a bank, a CPA, attorney, etc.) but sometimes it might be a family member who has the experience to warrant a court appointment. The conservator is given legal powers by the court that remain in place until the person recovers and is able to regain control over their financial affairs, or until death, whichever occurs first. Many times a person who has undergone a conservatorship proceeding may be placed in a residential treatment facility and the person who has been appointed as their conservator will manage their finances, bills, obligations, contracts, housing and other financial decisions on their behalf.
WHAT IS PROBATE COURT?
Probate is also a legal proceeding. When a person has died with no will the court supervises the estate, ordering property distributed according to the deceased person's instructions, or if there is no will, then according to local state law. An executor or personal representative is appointed by the court and he or she has the responsibility to report back to the court as matters are accomplished. Tax returns are prepared and filed. Bills are paid. Mortgages are satisfied. When the court is satisfied that all of the heirs have been identified, the bills, taxes and debts paid off, the remainder is distributed to the persons entitled under the Will. Dying without a will is dangerous. It can trigger distribution of assets that you do not control and may not have wanted.
LIVING TRUSTS AVOID THESE PROBLEMS.
With a Living Trust in place, you avoid both Probate and Conservatorship proceedings. That's because once you execute the trust and transfer ownership of your checking account, savings account, home and other property into the trust's ownership, the trust is in fact the 'owner' of the property. You of course are both the trustee (administrator) and the beneficiary during your lifetime. Under the trust, you decide who will take over as trustee afterward, and you alone decide who gets what and when. The successor trustees may be your most responsible child, a grandchild, a trusted fiend or relative or even a financial institution such as the trust department of a bank. With the Living Trust in place, you can simply bypass the need for either Probate or Conservatorship altogether.
If you are concerned about someone 'contesting' the trust, there is a way to avoid that problem. One way is to specifically disinherit someone by name so they can't later claim to a judge that you 'forgot them'. Another way is a way that I personally think is better. You leave that person a much smaller amount (say one dollar or five dollars) but no more, and you include a provision in the Living Trust that if any person contests your trust instructions, they are to be treated as if they died before you and are therefore entitled to nothing at all. This is an easy way to avoid having someone try to tie up your estate in litigation and at the same time penalize them completely if they choose to cause you any problems as to how you wanted to distribute your estate.
WHAT SHOULD THE LIVING TRUST OWN?
The Living Trust is a separate 'person' under the law and can own various kinds of property. Typically the kinds of assets that go in to a Living Trust include: your Personal Residence, Personal (not business) bank accounts, credit union accounts, certificates of deposit, brokerage or trading accounts, stock of subchapter 'S' corporations, personal furniture, tools and furnishings, and collections such as art, sculpture or other kinds of collections that may be of value. Basically, anything you want to avoid probate.
TAX PLANNING and THE LIVING TRUST.
There are some good opportunities for tax planning with the Living Trust. Using your Unified Credit, as of 2006 you are able to pass up to $2,000,000 (per person) down to your children. That's the number for single people. Married persons can each pass the same thing, so for a couple that means up to $4,000,000.
AVOIDING MISTAKES.
The most common mistake made with a Living Trust is the failure to properly 'fund' it. That means actually changing the ownership of your personal residence, personal checking accounts, etc. over to the legal name of your Trust. Some will establish a Living Trust, sign the appropriate documents (including the Power of Attorney for Health Care, the Pour-Over Will, Directive on Artificial Life Support, etc.) but never actually change legal ownership of their assets into the Trust.
Funding the trust means that you will record a new deed on your home in the county where the property is located. You'll also visit your bank or credit union and sign new signature cards as the 'trustee' of your Living Trust. If the bank or credit union needs a copy of your trust, remember that it is a private legal arrangement. So instead of allowing them to copy all the private provisions, simply provide them with a photocopy of the 'Abstract' (sometimes called the 'Certification') which sets forth the powers of the trustee and indicates who established the trust, etc.
Your Living Trust can literally save your surviving family members thousands of dollars in legal costs, probate fees, conservatorship fees, and months and months of administrative time. With a Living Trust as the owner, assets may be transferred relatively quickly and with a minimum of involvement by outsiders who might otherwise disrupt your plans for the loved ones you wish to benefit.
Article Source: http://EzineArticles.com/404558
Tuesday, October 18, 2011
How to Add an LLC Member to a Limited Liability Company
Adding a member to an LLC involves several steps and it is important that any limited liability company business do it properly. Mistakes can be disastrous. The process can vary and be very simple or extremely complex depend on each circumstances. However, here is the general 4 step process:
Step #1: Determine Whether the New Person is Eligible to be Added as an Owner
The good news is that the laws for this kind of legal entity are very lenient when it comes to member admission matters. There are no limitations or conditions when it comes to the residency, citizenship, location, affiliation or any other characteristic for a member. In addition, members don't have to be individuals. They can be corporations, partnerships, trusts and even other limited liability companies.
However, the laws also allow for an LLC business to impose its own set of restrictions, exclusions and processes for member admission. Because of this it is every important that you first consult the operating agreement of the business and review, in detail, the membership related provisions for conditions, limitations and other requirements. Step one is ensuring the specific person qualifies to be admitted in the first place.
If the LLC is being taxed under the S corporation structure, it is also essential that the member admission not cause your S election to be disqualified. Many of the S election requirements are directly related to the number and type of members in a company.
Step #2: Get Member Approvals and Meet All Process Formalities
In most cases, the operating document will require that a certain percentage vote be obtained by the existing members. This is usually done at an owner meeting or by using a standard governance form document called a Written Consent.
You should strictly obtain all voting approvals and meet any other conditions required and, even more importantly, you should document such approvals and actions in written consent documents. File these documents with the other official paperwork of the LLC.
Step #3: Have a Written Membership Issuance Agreement Documenting the Member Admission
This document does not have to be long and complicated if you have a straightforward transaction where a member is admitted in exchange for providing a cash contribution to the LLC. This document is typically called a Membership Issuance Agreement or a Member Subscription Agreement. For most small businesses, it is a simple one page document.
However, if there are other involved deal terms, then your issuance agreement must properly address them legally. One common example is if the ownership of the new member is subject to vesting or to promises in the future. I strongly recommend you use a lawyer to represent you or the LLC in these cases as the potential consequences of improperly addressing additional matters can be significant. I have seen businesses go under as a result of member disputes that could have been easily avoided.
Step #4: Ensure the new LLC Member Agree to the Operating Agreement
The operating agreement is so vital. It not only addresses how the business will be operated but it also defines the rights and obligations of each owner.
When you admit a new member to an LLC, that person needs to sign a written document agreeing to be bound by the operating agreement and all of its provisions. Hopefully your operating document imposes this as a condition to completing a member admission transaction (every one should have this). Regardless, this should be a required step every time.
Article Source: http://EzineArticles.com/4106283
Monday, October 17, 2011
Will Vs Living Trust: Which Is Right For Me?
You have worked very hard during your lifetime and it is only natural that you would like to leave a legacy to your loved ones. It would be wise to find a way to retain some control over the assets. No one wants the IRS, creditors or even a divorce to prevent loved ones from enjoying the benefits of your legacy. Even if you are a person of modest means, you have an estate. Your estate consists of all your personal and real property, such as, retirement accounts, a home, jewelry, rare collections, etc. There are many strategies to ensure your property is distributed according to your wishes and in a timely fashion. The most basic methods to transfer a legacy are Wills and Living Trusts but, which is better for you?
So What Is a Will and How Does It Work?
A will is a document that directs the distribution of the property owned by an individual at the time of death. To be effective, a will must be executed according to your state's statutory requirements. Generally, it must be in writing, signed by a person of sound mind and by competent witnesses. It can be revoked or amended at any time during your life but, any change to the will requires that both you and your witnesses sign again. After your death, the executor you have chosen must petition the court to start a probate process. As part of the process, your property must be valued for estate taxes. The probate process can range from six months for a small uncontested will and can last for years if there are delays in the court proceedings. As with any court proceeding, probate becomes part of the public record and is available for anyone to see.
...And What Is a Living Trust and How Does It Work?
In a living trust, the grantor transfers the assets to the trust but can retain the power to manage or revoke the trust. The trust also allows the grantor to decide who will be the successor trustee and the beneficiaries of the trust after death. If you are serving as your own trustee, the trust instrument will provide for a successor upon your death or incapacity. Therefore, upon death the court does not need to intervene and no probate is required. A trust can also be beneficial if you are disabled by accident or illness; the successor trustee can manage the trust property without a lengthy court proceeding. Because court proceedings are not required, the expense, publicity, and inconvenience of court-supervised distribution of your estate can be avoided.
A properly written and funded trust will:
- Avoid probate on your assets;
- Plan for the possibility of your own incapacity;
- Control what happens to your property after your death;
- Prevent your financial affairs from becoming a matter of public record.
Trusts also can include provisions to care for family members with special needs. It may be in the best interest of beneficiaries with special needs to have limited access to their inherited property. With a standard will your property will be passed on to those heirs but a will alone does not allow you to exercise much control over their use of the property.
A trust can also be established in a way that minimizes estate taxes. If the value of your estate exceeds the current estate tax threshold, you may wish to consider setting up a trust with tax planning provisions. An attorney will be able to advise you depending on your specific situation.
So the Bottom Line is...
A will is easy to establish, it requires minimal time and money but may leave your loved ones with a heavy burden due to court proceedings. A trust is more sophisticated than a will and enables you to accomplish much more than a will but do not overlook the fact that it involves more upfront effort and expense. A trust, however, allows you to establish provisions for that allow you to feel peace of mind and know that although you are no longer with your loved ones, they will enjoy your legacy exactly the way you intended them to. When choosing between a will and trust, remember that one size does not fit all. What is right for one person may not be right for everyone. Consult your attorney; your estate plan should be prepared in a way that best meets the needs of you and your family.
Saturday, October 15, 2011
Application For Citizenship
Citizenship is the status given to a legal member of the country. It involves rights, duties and privileges. Naturalization is the process by which a citizen of a foreign country becomes a United States citizen. People want to become citizens for a number of reasons. US citizens have the right to vote in elections, help family members immigrate, work in certain state and government jobs, and lastly they cannot be deported.
An application may be filed by a lawful resident of at least 5 years who has made a home in the U.S. for at least the past 5 years (or 18 months out of the past 3 years if married to and living with a U.S. citizen). Applicants must be at least 18 years old, have good moral character and be able to pass tests on English and U.S. History & Government. As part of the process the customer will be provided with an Eligibility Test to ensure they are eligible to apply.
By The People, Fairfield CA does over 80 different legal forms to help you get what you need done effectively and efficiently. Give us a call at 707-428-9871. Let us know how we can help you. If it isn't something that we do, we certainly know places to direct to you.
Friday, October 14, 2011
Tax Advantages of a C Corporation
As you may know, a C-Corporation is what most people generally think of as a corporation. The owners (called shareholders) are not generally liable for the debts of the corporation. The corporation is taxed as a separate entity under the Internal Revenue Code based on specific provisions applicable to C-Corporations, including special C-Corporation graduated tax rates.
The shareholders are again taxed only if the income of the C-Corporation is distributed to them in the form of dividends. This is referred to as the "double C-Corporation tax" and is sometimes the main disadvantage of the C-Corporation as a form of business enterprise for some small businesses. In addition, a C-Corporation is liable for the accumulated earnings tax that is designed to prevent a C-Corporation from avoiding the payment of dividends to shareholders.
The Accumulated Earnings Tax is an additional business tax that is paid by corporations who choose to retain accumulated earnings rather than pay out the earnings in the form of dividends to investors. As a tax on earnings that are to be diverted into settling outstanding debt or investing in some aspect of the company operation, accumulated earnings taxes are calculated in addition to the usual corporate income taxes that I have outlined below. It is important to remember that the amount of accumulated earnings may impact the total amount of income tax due in a given quarter.
The Tax Advantages of a C-Corporation:
1. C-Corporation Graduated Tax Rates: Click on this link to see the graduated tax rates.
NOTE: For any successful business, these tax rates may be significantly lower on income up to $100,000 than the individual tax rates imposed on the shareholder of an S-Corporation or LLC.
2. Fiscal Tax Year: A C-Corporation may adopt any tax year it elects, even if this year is different from the tax year of its shareholders. This allows flexibility with the accrual of income and the payment of owner's salaries and bonuses. An S-Corporation or LLC must generally adopt a calendar tax year.
3. Employee Fringe Benefits: Shareholders of an S-Corporation or members of an LLC who own more than 2% of the corporation's stock are not allowed tax-advantaged fringe benefits available to the employees of a C-Corporation. These benefits include accident and health plans, group-term life insurance, and employer provided meals and lodging.
A Note on Double Tax on C-Corporation Liquidation: If a C-Corporation sells its assets and liquidates, there is generally a tax at both the corporate and shareholder level. When it comes time to sell the company in the future, you can discuss ways to significantly reduce this and or eliminate them completely through proper exit planning.
One way a C corporation can lessen the impact of double taxation is by paying you (the shareholders) who are employed by the firm reasonable salaries and bonuses on a tax-deductible basis. I like to review your corporate and personal tax situation annually to determine an appropriate level of compensation.
I believe that in many instances, the optimum tax and legal solution is achieved by the use of multiple legal entities. For example, combining a C-Corporation operating entity that conducts the active day-to-day business of the company with an S-Corporation (or LLC) leasing and management company to hold the land and fixed assets of the business and is responsible for overall management.
Article Source: http://EzineArticles.com/6032223
The shareholders are again taxed only if the income of the C-Corporation is distributed to them in the form of dividends. This is referred to as the "double C-Corporation tax" and is sometimes the main disadvantage of the C-Corporation as a form of business enterprise for some small businesses. In addition, a C-Corporation is liable for the accumulated earnings tax that is designed to prevent a C-Corporation from avoiding the payment of dividends to shareholders.
The Accumulated Earnings Tax is an additional business tax that is paid by corporations who choose to retain accumulated earnings rather than pay out the earnings in the form of dividends to investors. As a tax on earnings that are to be diverted into settling outstanding debt or investing in some aspect of the company operation, accumulated earnings taxes are calculated in addition to the usual corporate income taxes that I have outlined below. It is important to remember that the amount of accumulated earnings may impact the total amount of income tax due in a given quarter.
The Tax Advantages of a C-Corporation:
1. C-Corporation Graduated Tax Rates: Click on this link to see the graduated tax rates.
NOTE: For any successful business, these tax rates may be significantly lower on income up to $100,000 than the individual tax rates imposed on the shareholder of an S-Corporation or LLC.
2. Fiscal Tax Year: A C-Corporation may adopt any tax year it elects, even if this year is different from the tax year of its shareholders. This allows flexibility with the accrual of income and the payment of owner's salaries and bonuses. An S-Corporation or LLC must generally adopt a calendar tax year.
3. Employee Fringe Benefits: Shareholders of an S-Corporation or members of an LLC who own more than 2% of the corporation's stock are not allowed tax-advantaged fringe benefits available to the employees of a C-Corporation. These benefits include accident and health plans, group-term life insurance, and employer provided meals and lodging.
A Note on Double Tax on C-Corporation Liquidation: If a C-Corporation sells its assets and liquidates, there is generally a tax at both the corporate and shareholder level. When it comes time to sell the company in the future, you can discuss ways to significantly reduce this and or eliminate them completely through proper exit planning.
One way a C corporation can lessen the impact of double taxation is by paying you (the shareholders) who are employed by the firm reasonable salaries and bonuses on a tax-deductible basis. I like to review your corporate and personal tax situation annually to determine an appropriate level of compensation.
I believe that in many instances, the optimum tax and legal solution is achieved by the use of multiple legal entities. For example, combining a C-Corporation operating entity that conducts the active day-to-day business of the company with an S-Corporation (or LLC) leasing and management company to hold the land and fixed assets of the business and is responsible for overall management.
Article Source: http://EzineArticles.com/6032223
Thursday, October 13, 2011
Five Reasons To Change Your Name
Changing your name legally is a big decision. You can change a name that was given to you at birth or, in the aftermath of a divorce, can change back to the name that you gave up when you got married. Either way it represents a big change in your life and before you do it you need to be absolutely certain that it is the right decision. After all, it costs money to do it, so you will need to be confident that you want to take this step. If you are changing the name because it will give you freedom from a period of your life that you wish to put behind you, the legal costs can be viewed as an investment in a better future. Here are five reasons people change their names.
1. In the aftermath of a divorce, people often want to change their name back to the name that they went by before they were married. It may be in order to remove any aspect of their ex-spouse from their lives in the case of an acrimonious split, or it may be simply to ensure a fresh start and a point from which to relaunch your life. Just as taking your spouse's name marked a new era, so will taking your old name back.
2. Equally, getting married is a time when you may change your name, usually to that of your new spouse. Some people, however, take the opportunity to keep their old name and add that of their spouse, in order to reflect the joining of two family lines. This is also a way of avoiding the awkwardness of telling one's family that they have chosen to take a different name. Either way, making the decision to change one's name marks a new chapter in life.
3. On immigrating into the country, an individual with a specifically non-American name may well choose to take the step to adopt a more Americanized name. This is a step that is often taken at the stage where the individual applies for naturalization, and during the interview that takes place as part of this process they may choose to prepare a petition for name change. The name change will become final once the federal court passes the application for naturalization, and can give the individual the chance to be treated as an ordinary American.
4. Changing one's name does not need to be the result of a change in legal circumstances. It may be the case that you wish to make a break with your name, due to circumstances that make living under the current name difficult. This may be the result of major adverse publicity for yourself or for another person with a similar or identical name, which could cause you to be treated differently and unfairly. For example, there are very few people in the world today living under the name "Hitler".
5. People may change their name for business reasons. The motivation behind this can vary, but as an example one might feel that a name which is also held by a well-known individual operating within their industry, or in one that is at odds with their own, might cause an adverse effect on their business. It is unlikely that one will be able to convince a court to agree to a frivolous name change however, so it is wise to be cautious.
Disclaimer: This article is for informational and entertainment purposes only, and should not be construed as legal advice on any subject matter.
Article Source: http://EzineArticles.com/2310802
Tuesday, October 11, 2011
How Can a Living Trust Help With Guardianship?
Most people worry, for good reason, about the trouble of getting a court-ordered guardianship if necessary. The truth is that much of the pain can be avoided by having a Living Trust.
If you were to be incapacitated, your financial business and assets can be taken care of in three ways. The three ways are:
· With a Living Trust
· Selecting someone to have a Durable Power of Attorney, or
· Court proceeding for Legal Guardianship
We will begin with the final method. If nothing is done and you don't designate anyone to handle your finances formally and you are incapacitated, one or more family members will have to file with the court and go through public incompetency hearing. In order for your finances to be handled, a guardian or conservator will be named. This is frequently referred to as a Guardianship or Conservatorship Proceeding. It is often difficult, time-consuming; full of stress and expensive. Because there is often disagreement and considerable confusion among family members, it can be especially difficult on families as a whole.
Once you are no longer able to speak for yourself, it becomes guesswork for anyone else to determine what you would have wanted from handling your finances to who you would have wanted as your guardian. Even the simplest decisions become difficult when someone else has to make them. To complicate matters further, until the court has declared you incompetent and assigned a guardian or conservator, nothing at all can be done with your property.
If you do nothing and basically force a competency hearing to appoint a guardian or conservator, you ipso facto choose the worst of the options. This should only be considered as an option if you don't have someone you really trust with your financial and other matters in the event you become incapacitated. In that situation, it is probably best to have court supervision of your affairs.
Putting what you want in writing is the best thing you can do for yourself and even more so for your family. Giving someone you trust a document that gives him or her the authority to take care of your affairs if you are not able to take care of them yourself is something you really should give considerable importance. This could be by way of a durable power of attorney or a living trust.
Giving a friend or family member you trust a durable power of attorney that becomes effective once you are no longer able to handle your own matters is the most common method. More often than not, this works very well. However, anyone who has attempted to make decisions with only the authority of the power of attorney knows is can be very difficult. This becomes more and more so as modern society takes stronger security precautions. If you needed to access a family member's savings account with only the power of attorney to prove your authority to do so, it can prove to be a difficult task. It is not only a problem for you but for the bank personnel, too, as they have regulations they must follow.
For this reason, putting your assets in a Living Trust along with instructions as to how the trust should be managed if you should be rendered incapable of managing it is often the best way to go. You would be the primary trustee and would name a successor to take over management should you be incapacitated.
The person you name to succeed you as trustee should have very little difficulty with the management of the funds in your living trust while you are incapacitated. This is because the assets are in the name of the trust and not your name. If you should be unable to manage the trust yourself, your successor becomes the trustee. Of course, you will need to "fund" the trust so that the assets are re-titled in the name of the trust.
The bottom line is that virtually everyone needs a Durable Power of Attorney and should at least consider the advantages of a living trust as well.
Article Source: http://EzineArticles.com/6581624
Monday, October 10, 2011
When is Probate Required? - Five Reasons to Go to Probate Court
Will I have to go to probate court? When is probate required? These are common questions people have when someone passes away. Probate laws vary from state to state so it is always a good idea to consult with probate attorneys about whether or not you need to attend probate court. But here is some basic information to help you determine if probate is required.
What is Probate?
In short, probate is the transfer of person's assets after they die. Probate is the legal process of distributing the assets and estate of a deceased person. This includes resolving all issues of probate property like taxes, insurance, title, and paying creditors for any outstanding money owed by the deceased. Probate is usually applied to large estates or significant sums of money. Assets eligible for probate varies from state to state, country to country. You have to check for specific probate laws or with a probate lawyer in your region to determine if the deceased's assets were significant enough to warrant a probate.
What is Probate Court?
Probate court is a surrogate court that interprets the will and appoints the executor. Probate judges the validity of claims made against the estate through heirs and beneficiaries as well as taxes and debts. Further reading about probate laws is available at ObituariesHelp.org
When is Probate Required?
There really are only five reasons why you'd have to go to probate court to either make your claim on the deceased's assets or to prove that you are a legal beneficiary. If any one of the following applies to you or to the deceased, then you might want to consult a probate attorney.
1. Probate court is necessary if the will is deemed invalid for one of these reasons:
- Improper Execution - it wasn't written clearly or it was not a legal will.
- Mental Incompetence - the deceased was not mentally competent when he or she made up the will so their decisions are questioned.
- Undue Influence - the deceased was under duress when he or she wrote up the will.
2. Probate is required if the deceased didn't have a Last Will and Testament. If there is no will, then there has to be a legal and equitable probate court process for distributing the deceased assets and for transferring the title of probate property. The only way to do this is with probate.
3. Probate is required if the assets were owned solely by the deceased. If there were no other owners or designates of the property or asset, then in most cases the property will have to be probated to get it out of the deceased's name and into the beneficiary's name.
4. Probate is required if the assets were owned as a Tenant in Common or Joint Tenancy. What this means if the deceased owned property jointly with another person, such as in the case of a common law marriage, then probate is required to ensure that the deceased's share of the property is properly distributed to legal heirs.
5. Probate is required if there are no designated beneficiaries or if all of the beneficiaries have predeceased the decedent. In the case of life insurance policies, retirement funds or certain savings accounts, beneficiaries are usually named. But if all the named beneficiaries have passed away or if the deceased didn't name beneficiaries, then probate is required to transfer the money or title to the beneficiaries.
One thing to remember about knowing when is probate required? Probate is required if there are significant assets to be distributed or creditors to be paid outside of what is legally stated in the will or if there is no will at all. If any of these five reasons apply to you or your situation, you can expect that probate is required and you'll have to appear in probate court.
Article Source: http://EzineArticles.com/2239636
Sunday, October 9, 2011
Why a Durable Power of Attorney is "Durable" and Why It's Great For Estate Planning
English common law understood that agents were sometimes needed in business and commerce. The president of Ford Motor Company, obviously, cannot be everywhere. He needs agents to conduct business. Also, someone who is on vacation out of the country and cannot sign a contract might appoint an agent to sign that all-important paper.
But under common law, an agent no longer had the ability to act when the principal was incapacitated (the "principal" being the person who confers the power). If the principal had dementia and could not sign an agreement, his agent could not sign either. His agent could have no greater power than the principal.
Now, if you haven't figured this out all ready, we will all feel the effects of aging -- if we are lucky. The symptoms are well known and do not require explanation. One of those symptoms particularly hard to take is the loss of memory; the ability to think as clearly as when we were younger. While this is not always disabling it is during this natural aging process that people often need help. But the English common law helped little if someone was in a coma, or had dementia.
Here Comes the Durable Power of Attorney.
But because helpless people obviously need the assistance of an agent the most, most jurisdictions now recognize a "durable" power of attorney (abbreviated "DPOA"). A DPOA is "durable" because it is in effect even when the "principal" is mentally incapacitated.
While a non-durable power of attorney merely authorizes the agent to act as long as there is no incapacity, a DPOA resolves this problem by allowing a trusted agent, or nominee, to act even if the principal lacks legal capacity -- or in other words when that person cannot legally make decisions on his or her own behalf due to mental disability.
In California, a DPOA must have specific words to be "durable." It must state, as provided in California Probate Code §4124, that: "This power of attorney shall become effective upon the incapacity of the principal", or words to that effect.
Some Benefits of a DPOA
A DPOA has specific benefits; in fact, I would go even further to state that nearly everyone with a formal estate plan should consider having one. Here are some of the benefits:
- Often one may avoid an adult conservatorship. A primary benefit of having a DPOA is that it can often substitute for a formal conservatorship, which is often a costly court proceeding requiring continued court supervision. So if a person is under a disability and has a properly worded DPOA, his or her agent may be able to write checks, manage finances, or to take actions with regard to that person's estate plan (like funding a trust) without specific court supervision.
- It can be rapidly effective. A DPOA can be effective immediately, or virtually so, without undergoing lengthy proceedings in Probate Court.
- It should be accepted in other states. A valid DPOA should be accepted in other states. California has a specific statute, Probate Code §4053, which specifically recognizes valid DPOAs executed in other states. However, with some states this may not be the case if the document grants a power not authorized in that state. However (and this "however" is big!): The IRS does not make it easy to recognize an attorney prepared power of attorney. There are hurdles set forth in specific Treasury Regulations [See, for instance, Treas. Reg. §601.503] and IRS practice making it difficult for an agent to sign off on tax forms. [IRS Deskguide (Publication 1514)]. However, a California taxpayer with a valid, properly executed power of attorney should not have any problem with the California Franchise Tax Board signing off on a state tax form.
- DPOAs are flexible. Specific authorizations, or "powers," can be added or restricted in the governing agreement. The specific provisions are up to the principal.
Of Course, Not All is Perfect...
While very useful, the DPOA is not perfect by any means. One major problem is the possibility of abuse.
While conservatorships are bulky legal proceedings, there is at least court supervision. The DPOA lacks supervision and abuses have occurred, all too often. While conservators must jump through many legal hoops, there is no active court supervision or "hoops" for an agent under a DPOA. For example, California requires that conservators provide a court approved accounting of their financial activities. It also requires that conservators be bonded. But without a specific court order there are no such requirements for a mere agent.
Court proceedings can be filed, but that is often impractical. While court proceedings can be instituted to compel (for instance) the agent to submit an accounting or to revoke the agent's authority, this is done all too infrequently. There is a big difference between a court supervised conservatorship, and filing a petition with the court.
In any event, who is going to file the petition with the court? Remember: The principal is mentally incapacitated! Comatose people generally can't file probate petitions to compel their agents to account!
Sure, there are risks, and they can be addressed somewhat (but not completely) through a well-drafted document and some common sense precautions. A DPOA may not be for everyone. However, everyone should at least consider a DPOA as an element of his or her estate plan. An effectively drafted DPOA can "round out" a comprehensive plan, and fill in the blanks not covered in trusts and wills.
Disclaimer: The information in this article is not legal advice, and the use of it does not create an attorney-client relationship. Any liability that might arise from your use or reliance on this article or any links from this article is expressly disclaimed. This article is not to be acted upon as if it were legal advice, and is subject to change without notice, or may include obsolete or dated information, or information not relevant to your jurisdiction. If you require legal services, you should consult with an attorney.
Saturday, October 8, 2011
Living Wills and Power Of Attorney For Health Care
When determining end of life decisions, there are two different ways this can be handled. There is a living will or power of attorney. Picking one of these is important, so that family and/or friends are able to make decisions based on your specific wishes. This means there is less chance of disagreements occurring and they are not stuck making a tough decision either.
There is a difference between the two and what you are looking to have take place when there are end of life decisions to be made, will determine which choice you go with.
Having A Living Will
There are a few things that a living will does in the event that an end of life decision needs to be made on your behalf:
- It specifically lets family/friends know the type of care you do and do not wish to receive.
- This is only when you are completely unable to speak your own wishes.
- The living will can be specific or general in nature.
- It can specify which procedures you want to have done and which you do not want done.
- The living will can be very general and this allows family/friends to make the decisions, however in the case of a living will, a power of attorney should be completed as well.
The main reason that a power of attorney should be completed with a living will, is that even when you have tried to cover possible circumstance, many times there are still situations that arise that are unforeseen. Having a power of attorney in place ensures that your wishes are covered and that if need be there is someone in place to make any very difficult decisions.
Having A Power Of Attorney
A power of attorney in conjunction with a living will does a few things when there are end of life decisions to be made:
- The agent can make decisions that are not in the living will.
- The agent can not change your living will.
- The form only allows the agent to make decisions that will supplement the living will.
- The power form is meant to cover issues that may have not been specified in the living will.
Keep in mind, that when there is an agent in affect already for financial matters, this can cause a conflict with an agent that is appointed for health matters. Make sure that they are different people, but people that can work together and that each will have your best interest in mind.
With either a power of attorney form or a living will, each state has different rules to create these, however typically a person must be 18 years of age and competent enough to complete the forms.
Friday, October 7, 2011
What Is a QDRO?
A QDRO or qualified domestic relation order is a domestic relations order that creates or recognizes the existence of an 'alternate payee's' right to receive, or assigns to an alternate payee the right to receive, all or a portion of the benefits payable with respect to a participant under a retirement plan, and that includes certain information and meets certain other requirements. It is a judgment, decree or order that is made pursuant to the state domestic relations law and that relates to the provision of child support, alimony payments, or marital property rights for the benefit of a spouse, former spouse, child, or other dependent of a participant.
A state authority, generally a court, must actually issue a judgment, order, or decree of otherwise formally approve a property settlement agreement before it can be a 'domestic relations order' under ERISA. The mere fact that a property settlement is agreed and signed by the parties will not, in and of itself, cause the agreement to be a domestic relations order.
There is no requirement that both parties to a marital proceeding sign or otherwise endorse or approve an order. It is also not necessary that the retirement plan be brought into state court or made a party to a domestic relations proceeding for an order issued that proceeding to be a 'domestic relations order' or a 'qualified domestic relations order'. Indeed, because state law is generally preempted to the extent that it relates to retirement plans, the Department takes the position that retirement plans cannot be joined as a party in a domestic relations proceeding pursuant to state law. Moreover, retirement plans are neither permitted nor required to follow the terms of the domestic relations order purporting to assign retirement benefits unless they are QDROS's.
What you just read is the complete definition according to ERISA (Employee Retirement Income Security Act of 1974) and the Department of Labor. So what does it mean? It means that in order to 'split' any part of one spouse's pension or retirement plan held at their current or past employer with the divorcing spouse. This crucial legal document is necessary to complete the final step in dividing retirement assets in divorce.
Here are some common misconceptions from clients:
- A QDRO is not necessary to divide an IRA; the final divorce decree will suffice with investment companies and banks. Caution to investments held in annuities and investments with surrender charges. Call the company to find out what, if any surrender charges there will be before signing the final decree.
- The misconception that the divorce decree is accurate on how retirement assets should be divided; to ensure an 'accurate' divorce decree, have your attorney share the language used in the decree to divide the retirement assets with the attorney drafting the QDRO before the final hearing. This language must be approved by the employer before the judge signs the final order.
- My divorce decree is all I need to get my portion of retirement assets; we recommend having the QDRO ready and approved by the employer's benefits department when finalizing the divorce. This way the judge can sign both the final decree and the QDRO at the final hearing. Otherwise it may take 6 months to 2 years or longer before you can have these assets placed in your name.
- The spouse receiving his/her portion of retirement assets will have to pay taxes on their portion. There are options to receiving your portion of retirement assets without paying full taxes. Call us, we can show you your options.
- My spouse has a 401(k) and a pension to divide, all I need is one QDRO; This is wrong, each plan will require a separate QDRO. Please ask your attorney what your QDRO will cost and who will pay for it and put it in the final order. They may cost from $650 to $1,200 each!
- The pension is split and QDRO is complete, now I can get my portion of the pension; this is not always the case, you must know what your options are before agreeing to split the pension. It depends on what the plan administrator outlines about your options. Some may require the alternate payee to turn a certain age before having access to income or a lump sum option. So if you are expecting income now, you may have to wait until you and/or your spouse turn 65.
- My attorney can draft the QDRO as part of their retainer; most attorneys do not draft QDRO's as part of the divorce, they outsource the job to another qualified attorney. The attorney drafting the QDRO must obtain a sample or model QDRO from the plan administrator to properly prepare the document. Most companies will supply this model or sample to the QDRO attorney
- What happens to my money once the retirement plan or pension is in my name? You have several options depending on the plans rules. If it is a 401(k), then your portion can be rolled into an IRA without paying taxes or penalties. If you are under 59 ½ and decide to take money from your plan you will be subject to not only income taxes, but a 10% early withdrawal penalty too!
These are just some of the many questions that client's ask us. The process can be overwhelming and confusing, but to us, it is just part of the completion of the divorce decree.
Thursday, October 6, 2011
How Does A Promissory Note Work?
A promissory note is a legal document that allows companies and also individuals to get financing from a source other than a bank. Thankfully, here in the U.S. banks don't have a monopoly on lending, you can legally loan some one money with a promissory note. Any one can become a lender.
Promissory notes are debt instruments that are like a legal IOU. Terms are drawn up and agreed upon by both the lender and the recipient. The recipient signs the document and is from there on legally binded to uphold his/her end of the bargain. Money owed from a debtor who refuses to pay can be easily collected in small claims court, or a general civil suit. The terms agreed upon can include things like interest rate, a repayment schedule, and the consequences of default (failure to uphold obligations).
Promissory notes are often times used by companies to create additional corporate credit when they can no longer get additional lending through a bank. Lenders who issue these notes can even turn around and sell them to another buyer. Investors can even have these notes reviewed by the Securities and Exchange Commission to ensure the company is able to repay its debt.
Another popular use for promissory notes is to get a loan for a home when there is no credit or not enough credit available to them from a bank. This is used mainly by people who are self-employed with a widely varying income from month to month. Creditors tend to discriminate against these types of people. If your income has dropped creditors will definitely discriminate against you no matter how much income you've saved. For those who have these conditions then they have no other choice.
When creating a promissory note, it is a good idea to get it notarized so that the obligation is publicly recorded and legal. This will make all the terms and conditions legally binding, and any violation will not be tolerated in court.
Article Source: http://EzineArticles.com/1157815
Wednesday, October 5, 2011
Tuesday, October 4, 2011
Can I Get Full Child Custody in Uncontested Divorce?
Divorce is hard as it is; which is why many couples who are getting divorced choose to go the uncontested route because it is easier, simpler and less painful in many cases. An uncontested divorce means that both parties reach an agreement as to a divorce settlement involving division of assets and property, child custody, child support, spousal support, etc. without the assistance of the court. The minute that one of the parties objects to a certain issue or the couple is unable to reach an agreement, the divorce becomes contested and is no longer uncontested.
If the couple has children, an officer of the court may still be involved to help determine child custody and child support issues. This is where a lot of divorces become contested, as both parties are hoping for full custody of their children. When this happens, both parties should speak with their attorney and the court at this point may get involved in determining custody and support. Still, if there are no objections to one parent receiving full custody, the divorce may stay uncontested, so to answer the question posed in the title, yes it is possible.
Parents should be aware that full custody often refers to full physical custody, meaning that the child will live with them permanently. However, the non-custodial parent is often still granted visitation rights on weekends, holidays, etc. Physical custody may also be joint in which both parents share physical custody of the child. Even if one parent has full physical custody, joint legal custody is often granted. Legal custody refers to who is making decisions regarding the child's health, education, religion, etc. Many divorces end in full physical custody and joint legal custody, but it varies from one case to the next.
Uncontested divorce is a great way to avoid animosity that often arises when the couple is fighting over certain issues. When children are involved, animosity in the divorce may be very stressful on them, especially when they are being tugged in two directions. This is why some couples choose to keep the courts out of it as much as possible and reach an agreement on their own. This may not only help reduce the stress on the child, but may also help reduce the stress on the couple getting divorced. The uncontested divorce may also be less expensive than a contested divorce, adding to its appeal.
Article Source: http://EzineArticles.com/6360724
Monday, October 3, 2011
The LLC Is the Best Business Structure for Small Businesses
The limited liability corporation (LLC) is the best business structure, for small businesses because it allows them to behave like a corporation when dealing with the public, but like an individual when dealing with the Internal Revenue Service (IRS). The corporate structure of the LLC provides the very important legal protection from claims against the owner's personal assets, while the tax laws allow the LLC to choose a tax classification that is suitable for the business. To choose a classification, the LLC must file form 8832 with the (IRS) within 2 and a half months after registration.
In dealing with The IRS the LLC has choices about how to be classified for tax purposes. A single member LLC can choose to be classified as a sole proprietorship or a corporation. Classification as a sole proprietorship allows the business owner to report business transactions with the individual return on schedule C, avoiding the cost of preparing a separate business return. A multi-member LLC can choose to be classified as a partnership or a corporation.
The LLC provides an added level of flexibility in that the business can change its tax classification to suit the needs of the business and the owners. For example a single member LLC may choose the classification of sole proprietorship initially, when profits are small and there is no advantage to be classified as a corporation, but change its classification to a corporation at a later date when profits are larger, and tax avoidance strategies are needed.
There are some rules members of LLCs need to be aware of. Once the LLC is registered, the business owner has two and a half months to file form 8832 to choose its tax classification. After the LLC files the initial form 8832 choosing its tax classification, it can change that classification every 5 years. If form 8832 is not filed, the IRS will determine the tax classification of the LLC. In the case of a single member LLC, it will be classified as sole proprietorship and in the case of a multi-member LLC it will be classified as a partnership.
The structure of the LLC is perfect for a small business as it provides the business with credibility and the owners with legal protection from day one, but allows the business the flexibility of changing its tax classification with the IRS therefore taking the best advantage of the tax code.
Article Source: http://EzineArticles.com/6567805
Sunday, October 2, 2011
Uncontested Divorce
An uncontested divorce is a divorce case where both parties are in total agreement on all issues. This allows for the case to be finalized in one court date. A typical uncontested divorce case can be completed within four to six weeks. All required documents are prepared and sent out for signatures.
Once the documents have been returned, they are filed with the clerk of the circuit court. A court date can then be set where the proposed Judgment and attached Agreements can be submitted before a Judge for approval. Once the Judge signs the Judgment for Dissolution, the court order for divorce is official.
Uncontested Divorces are more common than many people may think. Some are surprised to learn that parties can mutually agree upon the terms of their dissolution. Not every case involves a highly contested custody battle. To the contrary, many couples often have no children, little property to divide and little joint debt.
In those cases, an uncontested divorce is the best option for both parties. It brings a quick and swift resolution to a broken relationship. It saves the parties time, money and heartache and it takes the decision making out of the hands of Judges. It effectively allows the parties to decide how to complete their divorce on their terms.
The most common ground that is alleged in an uncontested divorce is irreconcilable difference. The parties must have been living separate and apart for a period in excess of two years. However, that two year waiting period can be reduced down to six months if the parties stipulate to that fact in writing.
Article Source: http://EzineArticles.com/2472236
Saturday, October 1, 2011
What You Should Know About Guardianships and Conservatorships
There is a lot of fear involved when a loved one becomes unable to care for himself. Whether it is a physical problem or a mental one, the stress and concern created will not just go away. Your loved one must be cared for and protected, both physically and financially. That is why conservatorships and guardianships are so important; they establish a system that allows you to manage the affairs of another individual who cannot manage for themselves. Here is a brief overview:
Conservatorships are for people who cannot manage their financial assets for whatever reason. If your loved one is not able to manage their own financial affairs, you can be appointed as their conservator. As a conservator, you will be given trustee status, which means you can handle financial affairs for them without their pre-approval. While you will not have any power over personal care decisions, you can choose to redistribute funds, invest in stocks, and even purchase property in order to protect the financial status of the afore mentioned individual. For those with mental handicaps or Alzheimer's disease, this type of conservatorship can be extremely helpful.
However, guardianships are quite different. While in a conservatorship, you are only responsible for the financial affairs of an individual, guardianships are for those individuals who are completely incapacitated. In other words, not only do they need someone to manage their money, but they cannot be responsible for their own general health or well-being either.
Guardians can either be nominated through a will or trust document or appointed by a court of law. In either case, the guardian is then responsible for the personal and public affairs of the incapacitated individual. This means that basics like food and shelter must be provided by the guardian for the individual, as well as medical treatment, assistance in money matters, and anything else that comes up. The individual (or ward) will no longer be allowed to enter into a contract of marriage, spend their own money, or make any financial or legal decision on their own behalf.
Legally, there are many reasons why an individual could require a guardian or conservator, such as mental illness, physical infirmities, substance addictions, or abuse situations. Each person is different and any legal decisions must be considered heavily before being put into action. The results of both guardianships and conservatorships are the same, however; safety and well-being for the individual in question.
Article Source: http://EzineArticles.com/4208201
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